Online plan to clear bank ID checks

Consumers applying for a current or savings account or a credit card with a major bank will be able to clear identification checks by uploading personal documents from their mobile phone, tablet or computer, instead of needing to go into a branch.

Lloyds Banking Group said its roll-out of the new service from next week will enable hundreds of thousands of people to open accounts more quickly and conveniently.

At present, around one in three consumers who apply online for a credit card or an account with the banking group, which includes Lloyds Bank as well as Halifax and Bank of Scotland, end up also needing to physically take documents into a branch so that they can fully pass background checks.

Lloyds said the new service will give applicants the option to upload documents they have taken copies of, such as a passport or a driving licence, rather than having to take these documents into a branch. Those uploading the documents as part of their application will be told immediately whether or not the copies were suitable.

The roll-out of the new electronic ID checks will start from next week, with people looking to add someone else to an existing account.

In the coming weeks, people will also be able to start applying for a current account in this way. Once this has happened, the system will also be made available by the summer to all consumers applying for savings accounts and credit cards with Lloyds, Halifax and Bank of Scotland.

People applying for a new mortgage with the group will not be part of the roll-out as these types of applications tend to take place in branch. However, the bank will be looking at how business customers could also be included, although there is no time frame for this.

The move comes as banks battle to attract current account customers, following the introduction of industry-wide rules in autumn 2013 which made it easier to ditch your old bank and switch to a new one.

The rules, being overseen by the Payments Council, have cut the length of time it takes to switch bank or building society from up to 30 working days previously to just seven. Outgoing and incoming payments are also automatically swapped over and the current account customer is guaranteed not to be left out of pocket if something goes wrong.

Some 1.16 million current account customers switched their bank or building society last year, marking a 12% increase on 2013.

Recent figures released by the Payments Council showed that Halifax appears to be among the early “winners” of the new current account switching scheme, making a net gain of just over 15,000 customers who used the switching service between between April 1 and June 30 last year.

Lloyds Bank made a net loss of more than 6,000 current account customers using the switching service over the same period, while Bank of Scotland made an overall loss of just over 300.

Miguel-Angel Rodriguez-Sola, digital director at the group, said: “The industry-wide current account switch service has already demonstrated a positive effect on switching in UK banking, and we believe this use of digital electronic identification technology can have an additional beneficial impact.”